Mortgage rates rise again but are still lower than a year ago

The average interest on 30-year fixed loans is 4.86%, up from 4.81% last week but down from 5.14% a year earlier.

Rising interest rates have lifted fixed mortgage rates back to the levels of last spring, Freddie Mac said in its last weekly report for 2010.

The survey of lender offering rates, released Thursday morning by the big government-controlled loan buyer, showed 30-year fixed-rate mortgages averaged 4.86% with 0.8% of the loan amount paid upfront in lender fees. That compared with 4.81% last week and 5.14% at this time last year.

It's about what lenders were offering last May, Fannie Mae said, adding that rates are still "incredibly low" by historical standards. For the year, 30-year fixed mortgage rates for well-qualified borrowers averaged just below 4.7%, the lowest since 1955, when a typical home cost $22,000, Freddie Mac economist Frank Nothaft said.

Tracking a sharp decline in Treasury bond yields, the 30-year rate sank below 4.2% for a week in October and again in November, Freddie Mac reported. But the Treasury yields, which directly influence mortgage rates, have risen in recent weeks on signs that the economy is strengthening

This week's average rate for a 15-year fixed mortgage was 4.2% with an average 0.8% in lender fees, higher than last week's average of 4.15%. At this time last year, the 15-year loan averaged 4.54%, Freddie Mac said.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.77% this week, with an average 0.7% in lender fees, up from 3.75% last week. A year ago, the five-year ARM, which becomes variable after five years at a fixed rate, had an average starting rate of 4.44%.

Freddie Mac asks lenders what rates they are offering to borrowers with solid credit, 20% down payments or equivalent equity if they are refinancing their homes, and enough verifiable income to afford the mortgage payments.

Mortgage professionals say these well-qualified buyers often can find slightly better rates if they shop around — 4.75% this week on average for a 30-year fixed loan, according to FreeRateUpdate.com, which monitors the industry's internal pricing documents.